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Honest signals are ones that are costly enough to make them uneconomical to produce if the true level of need or quality is less than indicated. In other words, when using honest signals, it does not pay for an individual to exaggerate or underplay their qualites or needs. Hard-to-fake signals are favored by natural selection when broad categories of signalers and receivers have conflicting interests but the interests of individual signalers and receivers converge. Receivers want good returns on their investments in others. When making decisions about whether to invest in an offspring, social partner or prospective mate, signal receivers are selected only to pay attention to signals that convey useful information relevant to estimating expected returns.

The game theoretical model of the war of attrition was applied to the problem, and appeared to suggest that threat displays ought not to convey any reliable information about intentions (Caryl, 1979). This lead to a re-examination of the empirical evidence, and much debate [How to reference and link to summary or text].

The handicap principle, first proposed by Amotz Zahavi (1975, 1977), is an influential theory which proposes that honest signals like showy plummage of certin male birds (peacocks tails being an extreme classic example) work to reliably communicate genetic quality by being costly, because only high quality individuals can afford to carry them. This theory was initially criticised by many as being either simply wrong (Kirkpatrick, 1986) or even hopelessly confused [How to reference and link to summary or text]. A number of models, most notably Alan Grafen's (1990) handicapped courtship display model, have since buttressed the idea greatly. Present debate on the topic deals not with whether such an effect is possible, but whether it is necessarily true of all biological signals. Some, such as John Maynard Smith, believe that signals can be both honest and cost-free (Maynard Smith, 1994). An honest signal may not need to have direct performance costs if, for example, there are socially imposed consequences to dishonesty (eg Enquist, 1985).

Sam Brown and W.D. Hamilton proposed the idea that autumnal leaf colouration was trees signalling to aphids and other pests. Autumn colour is costly to trees, aphids appear to preferentially avoid trees with bright leaves and tree species with bright leaves have more specialist aphid pests than do trees lacking bright leaves.